This application is directed to a computer-implemented system and method useful for managing collateral associated with the trade of financial instruments. In particular, this application is directed to a computerized system and method for assessing the eligibility of a particular financial security for use as collateral in a financial transaction, e.g., tri-party financing, stock lending transactions, or other financial transactions.
In global capital markets, timely and complete information is critical, especially when collateral is at stake. With increased risk aversion and increasingly complex credit requirements prevalent in the financial markets, finding the right collateral for a collateralized transaction can be a challenging task, particularly in providing trading parties the ability to derive maximum value from their collateral holdings in a secure and controlled manner. The ability to assess what securities can be used as collateral, and with whom, is vital to the efficiency of using collateral.
What is needed is a system and method for managing collateral in a financial transaction. What is further needed is a computer-implemented system and method that simplifies the identification of securities contemplated as collateral for a financial transaction, expedites securities transfers between receivers and providers of collateral in financial transactions, and which reduces the risk to both parties associated with over and/or under collateralization.